Dollar soars, kicking euro, sterling to multi-year lows

The U.S. dollar climbed on Thursday after the Federal Reserve cut rates a day earlier but cautioned it was not necessarily the start of a cycle of monetary loosening, sending the euro to a 26-month low and the British pound to a 30-month low.

In a widely expected move, the U.S. central bank cut rates on Wednesday for the first time since the financial crisis, in response to the growing risk of higher import tariffs and a slowdown in the world's major economies. But it also signaled that the quarter point cut was a “mid-cycle policy adjustment.”

The Fed's less-dovish-than-expected message triggered a rebound in the dollar, sending the index .DXY to a 26-month high of 98.93 on Thursday. It has since retraced some of those gains, but remains up 0.14% on the day.

The euro weakened to a 26-month low of $1.1025, and sterling touched a 30-month low of $1.2077. However, both the euro and the pound were gripped by their own issues.

Source : Reuters

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